Volvo plans to issue notes backed by transportation equipment loans and leases according to a presale report published Monday by Moody's Investors Service.
Citigroup and J.P. Morgan are the lead underwriters.
Moody's has assigned provisional ratings to six classes of notes to be issued by the trust, Volvo Financial Equipment LLC, Series 2013-1.
A $184 million money market class is rated 'P-1'.
There are three tranches of notes with a preliminary 'Aaa' rating: a $185 million tranche maturing in November 2015; a $179 million tranche maturing int March 2017; and a $69.59 million tranche maturing in August 2019.
There are also two subordinated tranches: $20.56 million of notes due August 2019 are rated 'Aa1' and $23.99 million of notes due August 2010 are rated 'A1'.
VFET 2013-1 is a securitization of loans extended to finance the purchase of trucking and construction equipment, both new and used. It represents the third securitization sponsored
by Volvo Financial Services, the U.S. based global captive finance subsidiary of Sweden's
AB Volvo.
Moody's noted that, from a collateral standpoint, VFET 2013-1 is slightly weaker than Volve's previous equipment loan securitization, with more small fleet loans (10% versus
3%) being the biggest factor. "Historically, loans made to obligors in the small fleet segment have shown worse credit performance than those made to obligors in the medium/large fleet segment." the ratings agency said.
